The Government has denied claims in a US senate report that Ireland’s tax regime has allowed Apple to avoid paying billions of dollars in tax.

Speaking in Brussels this morning, Tánaiste Eamon Gilmore said that Ireland has a “very transparent tax regime.”

The issues raised in the US Senate report, including the claim that Apple used two Irish subsidiaries which are not tax-resident anywhere, are “not issues that arise from the Irish taxation system,” he said.

“They’re issues that arise from the taxation system in other jurisdictions and that’s an issue that has to be addressed first of all in those jurisdictions.”

Mr Gilmore said that while the Government will look at the report, Ireland has a very transparent tax regime.

“Let’s be very clear about this, Ireland has a very strong, very transparent tax regime. There are problems in other jurisdictions, those problems are going to have to be addressed.

“Any loopholes have to be closed off, and we will work to have those closed off both at European Union level and through the work we are doing at the OECD.”

Ireland has 69 tax agreements with different countries around the world, he added. “We are anxious to ensure through the European Union and through the OECD that there’s a strong anti-tax avoidance regime in place. We will support whatever efforts are necessary to do that.”

The Senate investigations subcommittee found Apple has used a complex web of offshore entities, including two Irish subsidiaries which it claims are not tax-resident anywhere, to avoid paying billions of dollars in US income taxes.

The investigation brings the use of Irish companies to shift taxable US income to offshore firms in Ireland and substantially reduce the tax bill of major US corporations under intense public scrutiny.

The Senate permanent subcommittee on investigations says in a memorandum to senators released yesterday in the US that Apple exploited a loophole between the tax laws of Ireland and the US by not filing an income tax return or paying any income tax for one of its Irish subsidiaries in either country for five years.

The company, which was incorporated in Ireland in 1980, reported income totalling $30 billion (€23 billion) from 2009-12, the memo says.

A second Irish subsidiary, Apple Sales International, which the computer manufacturer claims is also not tax-resident anywhere, had sales revenue of $74 billion over the same period, according to the memo.

The subcommittee claims that the iPhone and iPad manufacturer has negotiated a tax rate of less than 2 per cent with the Irish Government, significantly lower than the State’s 12.5 per cent corporate tax rate, and has used Ireland as the base for its “extensive network of offshore subsidiaries”.

Apple chief executive Tim Cook and other company executives, along with US treasury officials, will appear before the Senate subcommittee at a hearing on Capitol Hill today.

Apple said in testimony to the subcommittee, released last night: “It should be emphasized that AOI [Apple Operations International] does not reduce Apple’s tax bill in the US.

“If AOI did not exist, the funds it receives from other foreign subsidiaries through dividends would simply remain in the custody of those subsidiaries and would not be subject to US corporate income tax.”

The subcommittee has highlighted how Apple has taken advantage of a difference between Irish and US tax residency rules. Its Irish subsidiary, Apple Operations International, is incorporated in Ireland but it does not pay taxes in Ireland because the company is neither managed nor controlled in Ireland.

The company also does not pay taxes in the US either because it is not US tax-resident under US tax law.

“Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven,” said Senator Carl Levin, a Democrat from Michigan and chairman of the subcommittee.

“Apple . . . has created offshore entities holding tens of billions of dollars, claiming to be tax resident nowhere.”

The subcommittee intended to “highlight that gimmick” and other tax avoidance tactics “so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed,” Mr Levin added.

Senator John McCain, a Republican from Arizona and a ranking minority member of the subcommittee, said Apple claimed to be the largest US corporate taxpayer but that it was also among America’s largest tax avoiders.

“It is important to understand Apple’s Byzantine tax structure so that we can effectively close the loopholes utilised by many US multinational companies,” said Senator McCain.

In its testimony released last night, Apple said it employed 4,000 people in Ireland.